Law on Obligations and Contracts

Midterm Simulated Exam

1. When the debtor binds himself to pay when his means permit him to do so, the obligation
is:

A. Conditional
B. Pure
C. Simple
D. With a Period
● Answer: D. With a Period

2. If the obligation of the debtor is “I will pay you my debt after I have arrived from abroad,”
this is:

A. Unenforceable
B. With a Period
C. Void
D. Conditional
● Answer: D. Conditional

3. When the characters of the creditor and the debtor are merged in one and the same person,
there is the extinguishment of the obligation by:

A. Compensation
B. Merger of Rights
C. Novation
D. Remission
● Answer: B. Merger of Rights

4. Through insidious words or machinations, A was able to induce B to enter into a contract
which without them B would not have agreed to it. There is:

A. Undue Influence
B. Fraud
C. Mistake
D. Misrepresentation
● Answer: B. Fraud

5. "A sells to B his lot and house in the city if A decides to transfer and live in the
countryside" is an example of:

A. Mixed Condition
B. Potestative Condition
C. Casual Condition
 D. Resolutory Condition
● Answer: B. Potestative Condition

6. It is a mode of extinguishing an obligation when two persons in their own right are
creditors of each other.

A. Confusion
B. Reformation
C. Compensation
D. Novation
● Answer: C. Compensation

7. A contract is in the stage of conception when:

A. There is a meeting of the minds.

B. Negotiations are in progress.
C. The parties come to an agreement.
D. The contract is perfected.
● Answer: B. Negotiations are in progress

8. Contracts entered into in a state of drunkenness or during a hypnotic spell are:

A. Void
B. Valid
C. Voidable
D. . Legal
● Answer: C. Voidable

9. Delay in the giving or delivering of a thing

A. Mora solvendi ex re
B. Mora solvendi ex persona
C. Mora accipiende ex re
D. Mora accipiende ex persona
● Answer: A. Mora solvendi ex re

10. Which of the following statements is false?

A. Obligations to give definite things and those that are not susceptible of
partial performance shall be deemed divisible.
B. Execution of a certain number of days of work shall be divisible.
C. Accomplishment of work by metrical units are divisible
D. An obligation to pay a certain amount in ten annual installments is divisible.
● Answer: A. Obligations to give definite things and those that are not
susceptible of partial performance shall be deemed divisible
11. This contract is without effect unless ratified:

A. Marriage between first-degree cousins

B. Contract of sale between two insane persons
C. Contract of sale between husband and wife
D. Donation between husband and wife
● Answer: C. Voidable

12. Which of the following contracts is not void ab initio?

A. Those whose object is outside the commerce of men

B. That whose object did not exist at the time of transaction
C. That which contemplates an impossible service
D. That which is undertaken in fraud of creditors
● Answer: D. That which is undertaken in fraud of creditors

13. Rescission of contract can take place in this case

A. When the thing which is the object of the contract is legally in the possession of a
third person who acted in bad faith
B. When he who demands rescission can return whatever he may be obliged to
restore
C. When the party seeking resolution can perform only as to part and as to the
remainder
D. When the seller cannot return the installments paid to him by the buyer
● Answer: B. When he who demands rescission can return whatever he
may be obliged to restore

14. A defective contract where damage or lesion is essential

A. Rescissible
B. Voidable
C. Unenforceable
D. Void
● Answer: A. Rescissible

15. An instrument may be reformed of

A. Simple donations inter vivos wherein no condition is imposed

B. Wills
C. When the instrument does not express the true intention of the parties due to
a mistake
D. When the real agreement is void
● Answer: C. When the instrument does not express the true intention
of the parties due to a mistake
16. Three of the following contracts are void. Which one is not?

A. Oral contract of the partnership of three partners and capital contribution is

more than P3,000 in cash
B. Written contract contemplating impossible services
C. Oral contract of partnership where real estate is contributed as capital
D. Agent's authority to sell land is given orally.
● Answer: A. Oral contract of the partnership of three partners and
capital contribution is more than P3,000 in cash

17. When a third person assumes the payment of the obligation even without the knowledge
and consent of the debtor but with the consent of the creditor

A. There is novation
B. There is delegation if the debtor is released
C. There is subrogation
D. There is expromission if the debtor is released
● Answer: D. There is expromission if the debtor is released

18. Which of the following is not an element of legal compensation?

A. Debts to be compensated are due and demandable

B. There is controversy or adverse claim over any debts to be compensated
C. There are two or more debts of the same kind
D. There are two or more persons who are creditors or debtors of each other.
● Answer: B. There is controversy or adverse claim over any debts to be
compensated

19. Contract which cannot be sued upon unless ratified, thus it as if they have no effect yet are
contracts which are

A. voidable
B. rescissible
C. void
D. unenforceable
● Answer: D. unenforceable

20. D forced C to execute a promissory note

A. the contract is rescissible because the contract is fraudulent

B. The contract is void because of the lack of consent on the part of C
C. C cannot demand payment from D because the contract is unenforceable
D. the contract remains to be valid
● Answer: D. the contract remains to be valid

21. An agreement in restraint of trade or establishing a monopoly is

 A. valid
B. rescissible
C. voidable
D. void
● Answer: D. void

22. The stipulation in a contract to the effect that the debtor should remain as a servant in the
house and in the service of her creditor so long as she had not paid her debt is void
because it is

A. contrary to good customs

B. contrary to law and morals
C. contrary to public policy
D. contrary to public order
● Answer: B. contrary to law and morals

23. A without authority from B sold the latter’s car in the name of the latter. The contract is
therefore

A. rescissible
B. voidable
C. unenforceable
D. void
● Answer: C. unenforceable

24. Statement I. An offer made by the principal is accepted from the time acceptance is
conveyed to him or his agent.
Statement II. The object of a contract may be future things including future inheritance

A. Only the first statement is true

B. Only the second statement is true
C. Both statements are true
D. Both statements are false
● Answer: A. Only the first statement is true

25. When the contract lacks one of the essential elements, the contract is

A. void
B. voidable
C. rescissible
D. unenforceable
● Answer: A. void

26. The span of time wherein a person, is in possession, temporarily of all his mental faculties
 A. Lucid interval
B. Reglementary period
C. Option period
D. prescriptive period
● Answer: A. Lucid interval

27. The act or means by virtue of which efficacy is given to a contract, which suffers from a
vice of curable nullity.

A. Ratification
B. Resolution
C. Rescission
D. Restitution
● Answer: A. Ratification

28. Which is false? An offer becomes ineffective if, before the acceptance is conveyed, either
of the parties becomes

A. civilly interdicted
B. insane
C. insolvent
D. immature
● Answer: D. immature

29. Which of the following is not a requisite for the validity of a contract?

A. Consent
B. Object
C. Cause
D. Delivery
● Answer: D. Delivery

30. When there is concurrence of offer and acceptance, there is

A. consummation
B. conception
C. consent
D. consideration
● Answer: C. consent

31. Statement I. Dolo incidente entitles the person against whom it was employed the right to
seek the annulment of the contract.
Statement II. Stipulation pour autrui is an exception to the rule on relativity of contracts.

A. Only the first statement is true

B. Only the second statement is true
 C. Both statements are true
D. Both statements are false
● Answer: B. Only the second statement is true

32. Which of the following must be in writing to be enforceable?

A. Lease of land for 12 months

B. Lease of car for 18 months
C. Both a and b
D. None of a and b
● Answer: B. Lease of car for 18 months

33. Three of the following contracts are void. Which is the exception?

A. Those whose cause, object or purpose is contrary to law, morals, good custom,
public order or public policy.
B. Those which are absolutely simulated or fictitious
C. Those whose cause or object did not exist at the time of the transaction
D. Those were both parties are incapable of giving consent to the contract
● Answer: D. Those were both parties are incapable of giving consent to
the contract

34. Statute of frauds is applicable to

A. executed contracts
B. oral contracts of loan
C. contracts not to be performed within a year from the making thereof
D. mutual promise to marry
● Answer: C. contracts not to be performed within a year from the
making thereof

35. A contract wherein both contracting parties are incapable of giving consent and yet
ratified by the guardian of either of the parties is

A. rescissible
B. voidable
C. unenforceable
D. void
● Answer: B. voidable

36. Which of the following constitutes fraud

A. Misrepresentation made not in bad faith

B. Misrepresentation by a third person and both parties were mistaken
C. Usual exaggerations in trade or dealer’s/sale’s talk
 D. failure to disclose facts when there is a duty to reveal them as when the
parties are bounded by confidential relations
● Answer: D. failure to disclose facts when there is a duty to reveal them
as when the parties are bounded by confidential relations

37. These are principles in contracts. Which is not

A. freedom or autonomy of contracts

B. relativity of contracts
C. perfection by mere consent
D. binding on third persons
● Answer: D. binding on third persons

38. S orally leased to R his parcel of land for a term of two years. The contract is

A. rescissible
B. unenforceable
C. voidable
D. void
● Answer: B. unenforceable

39. Those who in the performance of their obligations are guilty the following are liable for
damages, except:

A. Fraud
B. Delay
C. Negligence
D. Mistake
● Answer: D. Mistake

40. “Every person obliged to give something is also obliged to take care of it.” What standard
of care is required here?

A. Extra ordinary diligence

B. Diligence of a good father of a family
C. Law of stipulation of the parties provides for another standard
D. All of the above
● Answer: B. Diligence of a good father of a family

41. It means failure to observe for the protection of the interest of another person, that degree
of care, precaution and vigilance which the circumstances justly demand, whereby such
other persons suffer injury

A. Negligence
B. Fraud’
C. Legal
 D. Delay
● Answer: A. Negligence

42. A and B bound themselves solidarily to C under the following terms and conditions:

1. A will pay P15,000.00 to C on August 30, 2015.

2. B will pay P30,000.00 to C on December 30, 2016.

Their agreement was reduced to writing.

On January 1, 2025, C demanded the payment of the entire P45,000.00 from A. But A
refused to pay, arguing that C already slept on his right to collect the debt.

Is A correct in refusing to pay?

A. No because prescription is not one of the valid defenses in a solidary obligation.

B. Yes because prescription is one of the defenses available to a solidary debtor.
C. No because the right did not yet prescribe.
D. Yes because even if the right did not yet prescribe, applying principles of equity
and fairness, C can no longer demand because he already slept on his rights.
● Answer: C. No because the right did not yet prescribe

43. It is the juridical relation resulting from lawful, voluntary, and unilateral acts by virtue of
which the parties become bound to each other to the end that no one shall be unjustly
enriched or benefited at the expense of another.

A. Agreement
B. Vinculum juris
C. Contracts
D. Quasi-Contracts
● Answer: C. Contracts

44. This takes place when something is received when there is no right to demand it, and it
was unduly delivered thru mistake.

A. Solutio Indebiti
B. Negotiorum Gestio
C. Vinculum juris
D. Prestation
● Answer: A. Solutio Indebiti

45. Demand is not necessary to incur delay when:

A. Creditor refuses the performance without just cause.

B. The debtor is guilty of non-performance.
C. Time is the controlling motive
 D. If the obligation bears interest
● Answer: C. Time is the controlling motive

46. When an injury or damage is caused to another, there being fault or negligence and there
is no preexisting contractual relation between the parties, the source of the obligation is:

A. Quasi-delicts
B. Quasi-contracts
C. Contracts
D. Delicts
● Answer: A. Quasi-delicts

47. The following are the elements of an obligation, except:

A. Juridical/Legal Tie
B. Active subject
C. Passive subject
D. Consideration
● Answer: D. Consideration

48. It is a conduct that may consist of giving, doing, or not doing something.

A. Obligation
B. Juridical necessity
C. Prestation
D. Contract
● Answer: C. Prestation

49. This happened when the creditor makes a demand, and the obligor fails to deliver the
thing.

A. Negligence
B. Mora solvendi
C. Mora accipiendi
D. Compensatio morae
● Answer: B. Mora solviendi